A federal judge ruled yesterday that more than 120 lawsuits filed against Union Carbide Corp. over the Bhopal poison gas disaster should be tried in India rather than the United States -- a move that some lawyers said could delay any compensation to victims for years.

The ruling is a defeat for the government of India, which had hired its own U.S. law firm and filed suit against Carbide here on the grounds that its own courts were incapable of handling such a monumental case. Some lawyers said it could spur India, which had hoped to win a big award in U.S. courts, to accept a $350 million settlement offer that it previously has branded "totally unacceptable."

"I don't think anybody will see anything if this goes back to India," said John Coale, a Washington lawyer who claims to represent more than 50,000 victims. "If this doesn't get the Indians to settle, than they're crazier than I think they are."

In a long-awaited 63-page decision, U.S. District Judge John F. Keenan in New York said the Indian legal system "is in a far better position" than the U.S. courts to determine the cause of the accident and fix liability. He also said the costs of trying it in the United States would be so enormous that it would strain the U.S. judiciary "to the limits of its capacity."

"The administrative burden of this immense litigation would unfairly tax this or any American tribunal," Keenan wrote. "No American interest in the outcome of this litigation outweighs the interest of India in applying Indian law and Indian values to the task of resolving this case."

But some legal observers said the ruling could be a two-edged sword for Carbide. While ruling in favor of Carbide that India is the most "convenient forum," Keenan conditioned actual dismissal on Carbide's agreeing to accept any judgment against it in India and to submit to rules of pretrial discovery used in U.S. civil cases.

Those conditions were described by one victim's lawyer as "pretty severe," and Carbide Chairman Warren Anderson said that, while "pleased" with the decision, the company would have to review the precise wording of the conditions before it made any further comment.

Carbide's stock rose $1.125 to $24.25 yesterday after the decision.

"Those conditions meet many of our concerns," said Talmiz Ahmed, a consul in the Indian Consulate in New York. "Keenan has placed them under the control of the Indian courts. We can't express deep unhappiness over that."

The leading U.S. lawyers in the case, including the chief lawyer for the Indian government, said yesterday they are studying the wording of Keenan's opinion and would consider appealing it. But San Francisco attorney Melvin Belli, who claims to represent more than 2,000 Bhopal victims, said he would move immediately to circumvent Keenan by filing class actions in state courts and "keep it in this country."

"I predict these cases will be tried in the U.S. or they'll be settled by the end of the year," said Belli.

The Bhopal disaster, generally considered the world's worst industrial accident, began on Dec. 3, 1984, when a toxic cloud of methyl isocyanate escaped from a Carbide plant and floated over the city. Thousands of screaming residents, many of them blinded, vomiting and frothing at the mouth, fled toward local hospitals. While the precise number of victims remains in dispute, an estimated 2,000 people died and tens of thousands of others suffered tubercular diseases, congenital deformities and other ailments.

Within days of the disaster, American lawyers, led by Coale and Belli, flew to Bhopal and began signing up clients on retainer forms containing standard U.S. contingency-fee clauses calling for the lawyers to get one-third of any settlement.

The central issue in the case from the outset, however, was whether it should be heard in the United States, where Carbide is based in Danbury, Conn., or in India, where all the thousands of victims resided, but where there is no contingency fee for lawyers and where standards of compensation are much smaller. Lawyers for the Indian government noted in one legal brief that the Indian courts were plagued with "gigantic" backlogs of more than 10 million civil cases and that the country's legal system is not equiped to deal with such complex cases as Bhopal.

In his opinion, however, Keenan noted that India is a "world power" and he did not want to deprive it of the opportunity to "stand tall before the world and to pass judgment on behalf of its own people."

"In the court's view, to retain the litigation in this forum . . . would be yet another example of imperialism, another situation in which an established sovereign inflicted its rules, its standards and values on a developing nation."

Keenan's ruling comes barely six weeks after some American lawyers and Carbide reached a tentative out-of-court settlement providing for Carbide to pay $350 million into a special Bhopal fund that eventually would produce between $500 million and $600 million in compensation and medical aid for the victims. But Indian officials, who were not party to the agreement, rejected it as too low.